On May 7, the Conservative Party won a significant victory in the United Kingdom’s General Election, securing a second term for Prime Minister David Cameron and enough seats to form a government without their former coalition partners, the Liberal Democrats. The Conservative’s win was largely unanticipated by the media, even as the exit polls began to roll in, with Paddy Ashdown, chair of the Liberal Democrat’s 2015 general election team and leader of the party from 1988–99, claiming he would publically eat his hat if the exit poll’s predictions were correct. Despite the Conservative’s decisive victory, Columbia Business School economist Geoff Heal warns that several years of uncertainty still loom before the UK.
The single biggest question in the wake of the Conservative victory is the future of the UK’s relationship with the European Union. In 2013, Cameron promised an in-or-out referendum on the UK’s continued membership in the EU in 2017, a promise the party re-affirmed in the aftermath of the election. While markets initially surged in response to the election results — The Financial Times Stock Exchange 100 Index, colloquially known as the “Footsie,” jumped 2.3% while the pound sterling went up 1.5% against the dollar — concern over a potential British exit from the EU could soon dampen investors’ enthusiasm.
Source: A Decisive Victory — and an Uncertain Future — for the UK | Columbia Business School Ideas at Work
